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Lanka crisis would deepen if creditors disagree, IMF says amid China concerns

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World Bank senior mission chief Peter Breuer, right, speaks with Masahiro Nozaki, mission chief for Sri Lanka, during a media conference in Colombo on Thursday. Pic by Eranga Jayawardena

ECONOMYNEXT –Sri Lanka’s ongoing economic crisis would deepen if one creditor disagrees, a senior International Monetary Fund (IMF) official said amid concerns that China would not go along with Western creditors on debt restructuring on an equal footing.

All Sri Lankan creditors including China have to agree to restructure their existing loans to the island nation before the IMF starts disbursing a 2.9 billion US dollar loan on which preliminary agreement was announced on Thursday.

“If one creditor or creditors are not willing to provide these assurances, that would indeed deepen the crisis here in Sri Lanka and would undermine the repayment capacity,” Peter Breuer, senior IMF mission chief told reporters in Colombo when asked what if China does not agree on a debt restructuring plan.

“So a deepening crisis means that essentially the resources available to service the debt would become less,” he said at the media briefing after concluding a nine-day visit to finalize the staff-level agreement and a loan package for Sri Lanka’s reforms.

“So it is actually in the interest of all creditors to collaborate together and with Sri Lanka so that Sri Lanka can emerge from this crisis as quickly as possible and regain its repayment capacity and service this new debt that will come out of these debt negotiations.”

China has so far not agreed for debt restructuring which could include haircut or reductions in interest rates. Instead, China has expressed its willingness to refinance Sri Lanka to repay its past loans without any changes, Lankan officials say.Sri Lanka has already hired financial and legal advisory firms Lazard and Clifford Chance LLP to support its debt restructuring as the country is on the brink of bankruptcy. Lazard has been the legal adviser in Zambia’s debt restructuring where creditors included China.

The Paris Club of Western nations which has a well defined unified process for dealing with defaulted nations, which is familiar to the IMF.

“Sri Lanka is in a special situation that much of its official debt is outside of Paris Club creditors,” Breuer said.

“It is important to move expeditiously. We want to avoid the crisis from becoming worse.”



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Health authorities on high alert over Nipah Virus threat

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Sri Lanka has stepped up efforts to detect and respond to a potential outbreak of the deadly Nipah virus (NiV), with health authorities enhancing surveillance and laboratory readiness amid growing concerns in the region.

The Medical Research Institute (MRI), the country’s premier laboratory, has upgraded its testing capacity with the latest technology to identify the Nipah virus, enabling early detection of suspected cases, an MRI source said.

Nipah virus is a highly infectious zoonotic disease that can spread from animals

to humans and also through human-to-human contact. Fruit bats are the natural hosts of the virus.

First identified in Malaysia in 1988, the virus has since caused deadly outbreaks in countries including India and Bangladesh. Experts warn that Sri Lanka, with its close human-animal interactions and tropical climate, must remain vigilant against such emerging infectious diseases.

The case fatality rate of Nipah virus ranges from 40% to 75%, making it one of the most lethal viral infections affecting humans. There are currently no specific drugs or vaccines, with treatment relying mainly on intensive supportive care, health specialists say.

Symptoms of infection initially include fever, headaches, muscle pain, vomiting, and sore throat, followed by dizziness, drowsiness, altered consciousness, and neurological signs indicating acute encephalitis. Severe cases may progress to atypical pneumonia, acute respiratory distress, seizures, and coma within 24 to 48 hours.Authorities continue to urge heightened awareness and precautionary measures, emphasizing that early detection and rapid response are key to preventing outbreaks.

by Chaminda Silva ✍️

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Free Media Movement demands govt. accountability on free speech issues

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The Free Media Movement (FMM) has demanded government accountability on many freedom of expression issues referred to in a statement issued by the Human Rights Commission in a statement issued last week.

The statement under the hands of FMM Convener Lasantha De Silva and Secretary Dileesha Abeysundera says FMM has paid close attention to the statement issued by the Human Rights Commission (HRC) under reference number HRC/S/i/E/03/02/26. It has also informed that global stakeholders, including the International Federation of Journalists—of which it is a member—that are already closely monitoring this matter.

In its statement, HRC has elaborated at length on the issues that have arisen in Sri Lanka concerning freedom of expression and online safety. It specifically points out that the actions of the Sri Lanka Police have been a major contributing factor to these concerns. The Commission notes that recent conduct of the police has indirectly interfered even with the professional activities of journalists.

HRC has also drawn attention to the practice of summoning journalists and other activists before the police without providing clear reasons, in violation of circulars issued by the IGP. In certain instances, the police have stated that journalists were summoned due to alleged defamation arising from media activities.

However, freedom of expression guaranteed by the Constitution is restricted only within constitutionally prescribed limits. Accordingly, defamation that is no longer a criminal offence cannot be acted upon by the police. Such matters constitute civil offences that must be resolved before courts of law. The Commission further observes that attempts by politicians and others to lodge complaints with the Criminal Investigation Department regarding defamation are efforts to portray defamation as a criminal offence.

The HRC statement also addresses the Online Safety Act. While emphasizing the need to be mindful of online safety, the Commission points out that the current law does not address genuine needs. Therefore, as already demanded by many stakeholders, the government has the option to repeal this Act.

In addition, HRC has outlined a three-pronged approach that should be adopted to safeguard freedom of expression, as guaranteed by the Constitution and in line with Sri Lanka’s commitments under the Universal Declaration of Human Rights of the United Nations.

FMM said it is of the view that the Government of Sri Lanka must give serious consideration to this statement and to the recommendations emphasized therein. “This is a moment in which the accountability of the Sri Lankan government is being questioned. Accordingly, the Free Media Movement urges the government to take immediate steps to implement the recommendations set out in this statement,” it said.

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Opposition alleges Govt deliberately delaying PC polls

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ITAK Batticaloa District MP Shanakiyan Rasamanickam accused the government in Parliament on Friday of deliberately delaying Provincial Council elections, pointing to its failure to nominate members to a Parliamentary Select Committee.

The committee, tasked with considering matters related to Provincial Council polls, was announced on 6 January 2026. Opposition parties submitted their nominees promptly.

However, a month later, the government has yet to name its eight members, preventing the committee from being constituted and from commencing its work, Rasamanickam alleged.

Opposition representatives argue that this delay represents intentional inaction aimed at postponing elections. They urged the government to appoint its nominees without further delay to allow the committee to proceed.

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